Labor reform talks in Spain appear at a stalemate

June 9, 2010 8:21:31 AM PDT

June 9, 2010 --

MADRID (AP) - Talks between unions and management on reforming Spain's labor market appear to be at a stalemate, Spain's labor minister said Wednesday, making it more likely the Socialist government will impose its own labor reforms. The talks, which have been going on for months, aim to encourage hiring, resurrect a moribund economy and reassure jittery markets that Spain can trim its deficit and debt loads. But Labor Minister Celestino Corbacho said it will be difficult for the two sides to reach a consensus in the last round of talks Wednesday. Unions have threatened a general strike if they feel those changes harm workers, but a strike Tuesday by civil servants protesting wage cuts drew a weak response. That raised questions whether the unions had enough support to pull off a nationwide walkout. Corbacho said the government was ready to explain its reform proposals to opposition parties. "It is clear that, starting tomorrow, we have to begin talking to the parties in Parliament," he told reporters at Parliament. Barring an agreement between labor and management, the government says it will approve reforms by decree on June 16, one day before a EU summit in Brussels. These reforms would then have to be ratified by Spain's Parliament. Spain's labor laws have been widely criticized as rigid and discouraging companies from hiring. Spanish workers who are laid off get severance pay of as much 45 days per year worked, among the highest levels in Europe. The government is expected to try to lower that number to 33 days. Spanish media report the government is also considering making it easier for companies to argue economic distress as grounds to lay off workers with just a 20-day per year severance package.